Death Of Net Neutrality Will Hurt Cloud Adoption, Say Partners

Cloud-focused solution providers are joining top tech companies and leading venture capitalists in a battle cry to support Net Neutrality. VARs, interviewed by CRN, said the absence of Net Neutrality could deal a crippling blow to startups and future cloud adoption by their customers.

"Free and unmetered Internet is ideal. There are big risks to cloud adoption and innovation if ISPs have the power to throttle services and charge a premium for reliable fast Internet access," said Tony Safoian, CEO of SADA Systems, a North Hollywood, Calif.-based Google and Microsoft cloud reseller. "Customers live and die by reliability and predictable costs."

Net Neutrality advocates argue if big ISPs, such as Comcast and Verizon, are allowed to charge companies a premium for "fast-lane" and more reliable access to the Internet, it puts a strain on tech entrepreneurs developing applications and services dependent on reliable and fast bandwidth -- such as games, video and payment systems. ISPs argue that they need to be able to recoup large investments in building the Internet backbone and deserve the right to manage those costly networks the way they best see fit.

"I see it from both perspectives," Safoian said. "If a handful of companies are using up to 40 percent of your traffic, that's a problem." But Safoian said the entire debate seems charged with hyperbolic rhetoric on both sides, making it hard to separate the facts from politics.

"Most people in the channel aren't thinking about how this impacts business. Just because it's not obvious now, doesn’t mean there won't be an impact later," said Allen Falcon, CEO of Cumulus Global, a Westborough, Mass.-based Google solution provider. "If ISPs are going to be tempted to throttle down networks and charge more, clearly services will be at a disadvantage when it comes to performance in the marketplace."

Falcon said that if Net Neutrality is not maintained, there could be a dramatic curb in cloud adoption by companies concerned -- legitimately or not -- about quality of service when it comes to deploying services or relying on the public cloud.

"It's a growing concern and we have let our local legislators know our fears," Falcon said. "But we just can't afford the type of campaign that would get us heard.”

So far, the pay-for-play network "fast lanes" are not a reality. On May 15, the Federal Communications Commission is scheduled to publish a draft proposal for rules governing the Internet. While some companies, such as Netflix, Google and Microsoft, have already agreed to pay ISPs for preferential network access, those are separate matters that have nothing to do with the FCC's ruling on whether companies like Verizon and Comcast can charge companies more for more bandwidth.

Storage, backup and sync services would be easy targets for ISPs to red-flag for more money, said Larry Velez, CTO and founder of Sinu, a New York-based MSP partnering with both Google and Microsoft. "We have a number of customers right now that regularly share terabyte-size files between offices and clients. The demand to share data is only going up,” Velez said.

Velez said the absence of Net Neutrality will lead to fewer cloud deployments, less cloud innovation and reduced profitability for his company.

On Thursday, a group of 50 leading venture capitalists published an open letter to the FCC calling on it to uphold a Net Neutrality policy. That followed a letter sent Wednesday by a group of 100 tech firms, including Dropbox, Vonage and Cogent, which argued in an open letter that the FCC should protect users and Internet companies against blocking, discrimination and paid prioritization by ISPs.

XChange Solution Provider 2015 is finally upon us and the timing couldn't be better. The premier channel event is happening March 1-3 in Dallas, bringing together 225 solution provider decision makers from across North America. CRN is at the event to provide news, analysis and a firsthand take from partners.